Retailers to consumers: We’ll be watching you

Retailers and brands’ quest to engage consumers has gone up yet another notch.

At the National Retail Federation’s annual trade show 500 exhibitors ranging from Microsoft to Intel gave a taste of the way shopping and consuming may evolve.

Firms such as ShopperTrak showcased technology such as video analytics that would allow retailers to get a sense of the demographics of shoppers, from age range to gender, inside its stores. They’d also see which department you are shopping in, how long you stay in a section, and how many visits turn into actual purchases.

“It’s very important for retailers to understand not only how many people come into the stores, but what’s the demographic mix,” said ShopperTrak founder Bill Martin in an interview. When retailers know customer mix, “it helps (them) with creating product mix and appropriate staffing and that gives (them) a better understanding of how to convert our customers into buyers.”

Meanwhile, brands such as Adidas are using interactive walls and screens to feature more products and information and allow shoppers to engage in social media. Adidas, for instance, plans a worldwide roll out of its virtual footwear wall this year after testing it in 30 different locations. A piece of evidence behind the expansion: a virtual wall in a Japanese store alone accounted for 22% of all pre-sale orders for the launch of its $260 Predator sneakers in the country, out of a total of 420 sales locations, Chris Aubrey, Adidas’ director of commercial experience, told MarketWatch. “The virtual footwall is critical for Adidas and for retail,” he said. “Consumers are expecting much more from their retail experience. They want a more engaging experience.”

To make its brand stand out, spice and flavor company McCormick, opened its first store in its home base in Baltimore in August. The store has five interactive displays, including a “Guess that Spice” interactive machine that spews out the smell of spices. The machine then gives different values of coupons based on how well you do on the guess. The result: half of the purchases at the store come from those coupons while about three quarters of the people who come into the store are engaged in any of the five interactive games, said spokeswoman Kathleen Haley.

“We are trying to tell a larger story,” she said. “It helps with our conversation with retail partners. It’s a sensory experience.”

European coffee company Costa, meanwhile, is seeking to give consumers an experience of five senses. Starting in May it will roll out 10,000 coffee vending machines in Europe, using systems designed by Intel, that try to replicate the experience of a coffee bar. The vending machine, featuring looks created by a Ferrari designer, features the sounds that replicate coffee making in a coffee bar and spills out the aroma of the 276 flavor combinations such as hazelnut latte. There’s also an optical sensor that helps the company track anonymously the demographics of the consumers, said Michelle Tinsley, Intel’s director of retail. The machine also allows Costa to track how many cups are sold and when milk is running out.

“It’s a way to engage all five senses and bring across a great brand experience,” she said. “It represents Intel solving the industry problem of brand awareness.”

Virtual technology to make shoppers try on different things is also expected to be a growing focus.

For instance, software company FaceCake Marketing Technologies, in partnership with Microsoft Corp., introduced at the NRF show its Swivel Close-up, a virtual mirror and makeup counter that uses face recognition and Microsoft’s Kinect motion-sensing technology to allow consumers to virtually try different shades of lipstick, eye shadow or blush and place the images side by side to see how they would look on your face. It can also be used to virtually try on accessories and jewelry.

“All kinds of retailers have been coming up and excited about the” technology, said FaceCake CEO Linda Smith. Retailer “feedback has been amazing.”

There may be a good reason to want to get consumers to try on stuff: there’s a 67% conversion rate at stores from people who try on clothes, she said.

Story Conversation

About The Tell

The Tell is MarketWatch’s fast and engaging look at trends and themes in the day’s markets. Drawing on our reporters, analysts and commentators around the world, as well as selecting the best of the rest online, The Tell is all about the pulse of the markets through news, insight and strategic information to help you make the best investing decisions. Got a tip? Tell us at TheTell@MarketWatch.com